What is an appraisal waiver?

An appraisal waiver refers to a situation where a lender allows a real estate transaction to proceed without requiring a formal appraisal of the property. This can occur in certain circumstances, typically when the lender has sufficient confidence in the property's value, often based on the borrower's strong credit profile, the amount of down payment, or specific automated valuation models. An appraisal waiver streamlines the transaction process, saving time and costs associated with traditional appraisals.

While other options present definitions related to real estate transactions, they do not capture the specific meaning of an appraisal waiver. For example, a formal document stating the estimated value of a property describes an appraisal itself rather than the waiver of it. Similarly, a requirement for all transactions involving real estate is inaccurate; not all transactions necessitate an appraisal, especially those that qualify for a waiver. Lastly, a method to estimate future property values doesn’t pertain to the concept of an appraisal waiver, as a waiver relates specifically to the immediate valuation process for a current transaction rather than future predictions.